Euro softens against British Pound, traders await Germany and Eurozone GDP data
The EUR/GBP cross edges lower to around 0.8345 during the early European trading hours on Friday, pressured by divergent monetary policies. Traders will keep an eye on the preliminary readings of Q3 Gross Domestic Product (GDP) from Germany and the Eurozone later on Friday.
The Euro (EUR) weakened against the British Pound (GBP) on Friday, with the EUR/GBP rate falling to approximately 0.8345 during early European trading hours. This drop was attributed to differences in monetary policies. Later on Friday, traders will monitor preliminary Q3 Gross Domestic Product (GDP) figures from Germany and the Eurozone.
The European Central Bank (ECB) maintained its deposit rate at 2.50% at its October policy meeting, following a 25 basis point increase in September. The ECB indicated that rising energy prices posed upside risks to inflation and downside risks to growth, while underlying inflation and wages remained stable. The probability of a December rate hike by the ECB stands at around 67%, according to LSEG data.
The UK's Finance Minister, John Healey, announced a target date of 2030 for defense spending to reach 3% of GDP, alongside aid for Ukraine. The Bank of England (BoE) is expected to raise its benchmark interest rate by 25 basis points to 4.00% at its upcoming policy meeting, breaking an 11-month rate hold. Some underperformance in UK government bonds may be vulnerable to a retracement around the budget announcement.
EUR/GBP is currently holding above the 0.8350 support level and could potentially dip to the 0.8315 area, barring any unexpected budget-related developments.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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